The Journey to Procurement in the Next Generation

In today's business landscape, organizations are becoming more interdependent on external entities to meet their needs for skilled personnel, cutting-edge technology, products, and services. Whether it's sourcing raw materials for manufacturing or securing housekeeping staff, or even implementing automation technology for efficient distribution centers, organizations heavily rely on the value delivered by their suppliers and partners. This dependence necessitates effective coordination in logistics and optimization in commercial aspects.

Procurement plays a crucial role within any organization by facilitating the procurement process from these suppliers and partners. This role holds significant importance, especially considering the substantial portion of profit and loss that is influenced by expenditures on third-party goods and services. Therefore, the accuracy and efficiency of procurement processes are paramount.


Over time, organizations have come to recognize the profound influence that effective procurement practices can have on their ability to conduct business or deliver services to the community. In the past, procurement often played the role of the 'Corporate Police,' primarily focused on enforcing regulations, ensuring compliance, and fixating on pricing concerns. Consequently, a significant portion of procurement teams' efforts and resources were allocated to transactional functions, such as purchasing, payments, and supplier performance management, as well as the execution of sourcing initiatives. However, this approach has its limitations and is not conducive to fostering innovation and promoting organizational growth.


Next-Gen Pyramid Diagram

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Next - Generation Procurement Model



Procurement in the Next Generation model

Procurement in the Next Generation teams exhibit a pronounced commitment to delivering value. They possess a keen awareness of the organization's overarching strategy, and this awareness is mirrored in the strategic priorities of the procurement function. Through the automation and optimization of procurement operations, resources are freed up for the crucial task of delivering value, which holds paramount importance for both the organization and its clientele. Furthermore, Procurement in the Next Generation teams are adequately equipped with the essential elements required for success, including the right expertise, streamlined processes, effective governance, robust data management, cutting-edge technology, and adaptable operational structures. These foundational components are instrumental in maximizing the potential value that procurement can bring to the organization..

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